House sends Boeing incentive bill to Nixon
This article first appeared in the St. Louis Beacon, Dec. 6, 2013 - The Missouri House easily passed legislation to attract production of the 777x to the Show Me State, a move that wraps up a legislative special session that saw little suspense and few surprises.
A week after Gov. Jay Nixon called the legislature back for a special session, state Sen. Eric Schmitt's legislation passed the House 127-20, with two lawmakers voting present. Since no changes were made to the Senate bill, it will go to Nixon for his signature.
The possibility that Missouri could land the 777x production arose after a machinist union rejected Boeing’s contract to build the plane in Washington state. Nixon said that landing that work could transform Missouri's economy -- and bring thousands of high-paying jobs to the region.
Quick action was necessary, Nixon noted, because a response to Boeing's request for proposal is due on Dec. 10. A decision is expected early next year.
In a statement, Nixon said he greatly appreciated "the General Assembly’s work to send a bill to my desk in a timely manner so that we may submit a competitive proposal to Boeing on the aggressive timetable the company has set.
“Just as we worked together in a special session in 2010 to revitalize our auto industry and attract historic investments from Ford and GM, Missouri has once again demonstrated to the world that when it comes to creating good jobs for Missouri families, we compete and we compete to win,” Nixon said.
Among other things, Sen. Eric Schmitt’s legislation calls for up to $150 million a year in state tax credits for Boeing if the company creates at least 2,000 new jobs in Missouri over the next 10 years.
Nixon told reporters earlier this week that the incentives could cost the state $1.7 billion over 23 years. (His administration says the return to the state will be greater than that.)
After a veto session that showcased plenty of strife between the GOP-controlled legislature and the Democratic governor, the special session brought about far more consensus. Support came from a bipartisan collection of lawmakers, organized labor, business organizations and local officials.
“We’ve shown the world how Missouri can work,” said Missouri Chamber President and CEO Dan Mehan in a statement. “We can work together across the aisle and across interest groups to get the job done. That’s how you pass strong legislation and hopefully Boeing will now give us the chance to put that work to good use.”
The handler of the bill – state Rep. Anne Zerr, R-St. Charles – told her colleagues the legislation has enough “checks and balances.” State Rep. Doug Funderburk, R-St. Charles, said that the bill would ultimately be “good for America.”
“The Boeing that I have worked for 31.5 years has always had a very diverse workforce,” Funderburk said. “The Boeing I’ve worked for 31.5 years has always had a huge community presence into a lot of these neighborhoods with volunteerism and their money. You couldn’t ask for a better corporate and community citizen to be in your state and in your community.”
While the bill’s outcome was never in the doubt, there was a hiccup in the process. The House action was slowed by the discovery of a clerical error that apparently originated in the Senate. Senate President Pro Tem Tom Dempsey and some of Nixon's aides were in the House chamber to fix the problem. That issue was eventually resolved.
Still, the bill faced mild opposition during floor debate. Stare Rep. Stephen Webber, D-Columbia, said just because small businesses “don’t make $1 billion in profit year doesn’t mean that they shouldn’t be treated the same as everybody else.
“Just because you’re big doesn’t mean you should pay a lower tax rate than the hard-working small business owner,” Webber said.
While state Rep. Kevin Engler, R-Farmington, said he didn’t want to pick “winners and losers” in business, he said it was important to have incentives in the state’s arsenal to make a pitch to Boeing.
“Even though I would rather have a broad tax reduction for everybody, I’m going to vote for this so we can have a clear-cut message to Boeing that we want their jobs,” Engler said. “And if the governor thinks this is what we need to do to get it, I’m going to be for it.”
Whether Missouri will win production of the 777X is unclear. Several states are competing for the work, and the Seattle Times reported that Washington state is willing to shell out billions in incentives to keep Boeing.
Efforts to woo airplane makers to Missouri have faltered before. Bombardier decided not to relocate to Missouri, even after the legislature passed a $240 million incentive package. It became a prime example of how consensus in the realm of economic development doesn’t always lead to definitive results.
But Nixon said in his statement that the legislature's actions will give Missouri a chance to compete.
“Production of the Boeing 777x would create thousands of high-paying jobs, generate billions of dollars in investment and spur economic growth in every corner of our state. That’s why competition for this next-generation aircraft is so fierce," Nixon said. "Today, by reaching across party lines to develop an approach that protects taxpayers and guarantees a return on our investment, we are in a very strong position to compete.”